What Microsoft Office 14 Needs: A New, Separate SKU

March 15, 2009 at 12:11 pm | Posted in Blogs, Content Management, Microsoft, Microsoft SharePoint, Office, Web 2.0 | Leave a comment

Recently I posted some guesses as to what features Microsoft will put into Office 14’s content creation tools (the productivity suite consisting of Word, Excel, PowerPoint, OneNote).  But those were guesses about what Microsoft would do, not what they could do or should do. 

There’s a lot of interest in O14 since professional pundits (and swivel-chair pundits in fuzzy cubicles everywhere) want to speculate about whether the 800 pound gorilla known as Microsoft Office can be brought down by plucky upstarts like Google or Zoho, or free options like OpenOffice or IBM Symphony. But this speculation is misplaced.  I start the NextGen authoring section of my content creation seminar with a prediction:

If Microsoft is ever dethroned in the content creation market, it will not be because they were beat on features or marketing … it will be because of a fundamental shift in the content creation market for which they failed to adapt.

In other words, it is not Vendor X that will beat them by being cheaper or more feature rich.  It’s Suite X that will beat them with a different set of technologies that addresses a unique but growing subset of content creators.  There is a fundamental shift in how content is being created.  It has bubbled up from old concepts such as collaborative editing and been picked up by web 2.0 and its Gen Y adherents who think in rapidly produced, hyperlinked, searchable content chunks instead of ponderous, static, e-mailed documents. I introduced the NextGen content creation trends here (with further description here).  This is how I see the content creation environment today:

Next gen trends fig1 bg

Note that I chose to visualize this as a central core being expanded by these new needs rather than a versioning depiction such as 1.0 —> 2.0.  That’s because the core needs will always exist in enterprises, but we need to acknowledge a new set of needs that is not well met by the core authoring tools and that will account for an increasing percentage of content creation as Gen Y’ers enter the workforce and information workers get used to authoring in new ways via blogs and wikis.

We are at an inflection point in the way content is being created.  Microsoft would be unwise to pass up this opportunity to segment the market.  Microsoft may be able to get through one more major version of Office by stretching traditional document-related technology to fit.  But this anchors their attempts to address new content creation needs to a 1990’s document-centric mindset.  By carving out a new target market, they build incremental revenue (most buyers of this suite would still have needs for core Office as well), plant the seeds for a new franchise that would be small but grow more rapidly than Office, and compete better with innovative vendors that are unencumbered by entrenched bureaucracy and sunk costs.  And all while helping to mitigate the bloat and complexity of Office by separating out features that will be unused or confusing for many core Office users. There’s a chance that this would cannibalize Office 14 upgrades, but my instinct is that it would make no or a minor short term loss (since the new target market is small) and pay for itself within the next two versions of Office. It could be rolled out on half-cycles with Office to help avoid cannibalization and steady the famously spiky revenue stream and attention that Office releases garner.

Accordingly, I argue that Microsoft should create a new product (a SKU in industry parlance) for the NextGen content tools rather than continually trying to bolt onto Office Pro.  It could be called Office Extended, although some more thinking would elicit a more clever term.  Here’s how I would start:

  • OneNote would shift over to anchor the new suite.  With new branding and development, it can finally stand up as a new type of content platform that allows for content components, real-time collaborative authoring, and improved linking rather than just being a productivity add-on aimed at students and meeting notes.  OneNote will only be truly understood to represent a different paradigm when it breaks the chain it has to the Office Home and Student suite
  • The Live Writer blogging tool would finally get a real home here
  • Microsoft would have a place to create a real wiki rather than the SharePoint template that stands in as the official “Microsoft wiki” for lack of anything better.  No one – not even SharePoint folks – asserts that SharePoint’s wikis are in the league of any best of breed tools, and I can’t think why Microsoft would not want to compete for a best of breed wiki any less than they want to have a best of breed browser.  And remember the pain that being too slow to recognize a “good enough” 80/20 browser wasn’t enough caused them.
  • Microsoft would take an 80/20 swipe at the XML content creation market with a new Xmetal-like tool, much as they grabbed a new low end of the records management market with Microsoft Office SharePoint Server 2007

And that’s just a start.  Part of the idea is to give this new market segment a new matching suite to grow with.  This idea fits Microsoft’s software+services direction since a few of these products (wikis and blogs) are not purely client-based, so services are needed.  I guarantee the evolution of content creation is not over, so the new SKU provides a place with plenty of room to stretch and grow new creation mechanisms the market demands without having to add a 14th pound of flour to the 10 pound bag of Office.

Note: This is a cross-posting from the Collaboration and Content Strategies blog.

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